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Organizations use innovation and creativity to transform, reinvent, transition and modify the services and products they offer in order to accommodate the market needs and demands. Change is difficult for organizations that do not have innovative programs or think innovation to be an important advantage and ingredient for growth and profitability. Innovation is necessary to make the transitions and modifications to the business strategy which result in competitive advantage, meeting and exceeding the expectations of the customers and ultimately existence. This paper will examine the impact of innovation on Apple, Microsoft, Nike Inc. and describe how each company’s strategy, processes, products, and or services have been affected by innovation.
To understand the impact of innovation on strategy, processes, products and services the definition of innovation needs to be understood. Innovation is not about designing new products, innovation is about creating or delivering to customer’s products or services they don’t even know they want but now they must have (Harvard Business Review 2009). Innovation is the thought of a new creative method, process or idea to a service or product already in existence and that has worked well but now has been changed or modified to fulfill a different need, market or demand.
The change or modification will then bring additional revenue to the organization as a result of the innovative process. Strategy refers to how the organization will obtain the ends it seeks to achieve; strategy refers to a position taken by the organization. Processes are the learning, designing and planning of the strategy. Products are the results of goods through manufacturing or a service. Services are the efforts or work by one person or group of persons who benefit another person or group of people, services are considered to be intangible (Betina, 2003).
The impact of innovation is clear when looking at how any organization reacts and interacts with the changes of the market. The first organization that will be evaluated is Microsoft. Microsoft is one of the most profitable, most innovative and successful organizations in the world. Microsoft has successfully used innovation to maintain a competitive advantage and market share. Founded in 1975 Microsoft is the world leader in software services, solutions, applications and services that help business operate and stay competitive (Human resource management 2008). Microsoft is at the forefront of innovation and creativity providing software and hardware products for computing devices that in turn allow individuals and organizations to find creative and innovative applications to the technology to communicate and conduct business effectively and profitably.
Innovation has impacted Microsoft’s strategy, process, products and services equally. Microsoft offers a wide range of products for businesses and individuals such as infrastructures, financial management tools, networking, desktop platforms, mobility, web browser, programming, and the flagship product, the Windows Operating System (Microsoft). Just about every industry, private or public uses Microsoft products. Microsoft offers specialized products for industries such as the government, healthcare, manufacturing, entertainment and retail. At the same time Microsoft is able to offer the same services and products to small businesses and every day users with the flagship Office suite.
Microsoft has created a number of innovative products over the years and is difficult to choose one innovative product that has had a significant impact on the organization over another. This paper will discuss the most recent innovative product introduced by Microsoft, the Microsoft Surface. The technology behind Surface is called multi-touch and has been under development for at least 25 years. Originally pioneered by the University of Toronto (History of Microsoft), and later the product idea was initially conceptualized by Steven Bathiche a Microsoft hardware engineer and Andy Wilson from Microsoft research and development (History of Microsoft).
Microsoft Surface introduces revolutionary processes and applications to all public and private services. The computing surface platform responds to natural hand movements and capable of identifying real objects. The surface is able to identify finger orientation with multi touch and multi user applications. Surface is also able to use barcode tags to offer a variety of features, for example, provide the customer with a selection of wines customized to the meal being purchased, based on the wine or other objects set on the Surface. Harrah’s casino has introduced the Surface to the iBar ultra lounge providing a customized application to meet the entertainment venue needs, providing guests with a unique personalized and engaging social experience (Harrah’s 2009).
The Surface is revolutionary and a huge impact to Microsoft because of the future possibilities and innovations that will follow it. Already a second generation of the Surface is under development and testing, Microsoft believes that as the Surface continues to evolve the Surface will be used at every level and industry ranging from defense, education, and creative industries such as film and fashion. Microsoft envisions the future with a Surface in every desktop, refrigerator, television and in the rooms of every organization.
The Surface represents the next generation of computer software and hardware technology with a profitable business opportunity. The Surface will allow every user to improve and remove communication barriers, facilitate social interaction, build customer loyalty, and provide a unique and personalized shopping experience. Just as when the desktop was introduced and all the applications that come with it, the Surface will once again change the way in which people conduct business, interact with one another, shop, search for information, and entertainment.
Apple inc. has risen as an icon of personal computing and entertainment media since CEO Steve Jobs return to the helm of the corporation. Apple was founded in 1976 by Steve Jobs and Steve Wozniak who were looking for innovative ways to transform the digital computer in to a household appliance. From the first computing software applications and hardware, Apple consistently found innovative ways to expand around the world beginning with the Apple II computer which was widely adopted in the education sector during the 1970s (Starr 2009), to the latest innovation that catapult Apple as a leader in the digital industry, the IPhone.
An example of how Apples strategy was impacted by innovation is in how when Steve Jobs returned to Apple as the CEO, he quickly restructured the organization to discontinue all the products and services that were not making any money and weighing the organization with crippling financiallosses. One of the first strategic moves was to concentrate on the process and products that Apple would be profitable with. Apple first concentrated on developing the iMac which proved to be a success in addition, buying Apple time to restructure completely the organization. The iMac was selling about one million units per year (Apple Computer, 2009); the new body and translucent design helped reintroduce Apple in to the market, customers, and reestablished the organizations new direction highlighting the significance on design and personalization of the services and products.
More recent innovative products that have impacted the organizations strategy, process and products are the iBook, Power Mac G4, AirPort which helped popularize the use of wireless LAN technology to connect computers to networks. The Mac OS X which completely overhauled the user interface by marring the stability, security and reliability of Unix and lastly the iPod and IPhone, Apples new flag ship products (Apple Computer, 2009).
In 2001 Apple introduced the first generation of the iPod. The iPod was first released as a 5 gigabyte unit able to store around 1000 songs. Since the release of the iPod in 2001 the iPod has evolved in to an assortment of products such as the mini, iPod touch, the shuffle, iPod classic, iPod Nano and most recently the iPhone. Each of Apples products continues to undergo innovative changes that are affecting the strategy, product and service. Apple continues to build on proven products, making them slimmer, capable of storing more information and able to perform multiple applications. Apple restructures and redefined the computer and music industry when they successfully partnered with several record companies to join the music download service and provide customers with music customization and a concentrated source to find music, services, applications without having to shop at a store.
Apple understands the customer needs and how each of the products offered will satisfy those needs. Every feature and service Apple provides has a specific purpose and targeted audience, the color, the size, capabilities and the services needed to fully support the products are strategically created to serve each purpose. By continuing to innovate and build on existing products Apple has successfully harness the ability to predict future customer wants and provide a unique and personalized product for every individual.
Today Nike is known as the biggest training shoe company in the world. Nike is the number one producer of sport shoes across the international market. Nike is also in the business of marketing, design, development, and promotion of footwear, clothing of male, female and children, of products for specific athletic sports, casual wear or leisure purposes, and a number of other sports equipment. Nike has the largest market share of 43%, compared with competitors like Reebok, Adidas, Puma, Converse, and K-Swiss etc. Nike Inc. is listed number one in the Sports Clothing and Footwear Industry and ranked 136 in Fortune 500, for the year 2009, as one of America’s largest corporations (Fortune, 2009) with over $18 million in revenue and $1,888.4 million in profits.
Nike stated out in 1962 as Blue Ribbon Sports. Founder Phil Knight saw the need for a market that provided athletic shoes designed by athletes for athletes. In 1964, Bill Bowerman, Knight’s track coach and Phil Knight partnered to create Nike Inc. Nike’s grassroots strategy was born and founded in Eugene Oregon. By the 80’s and 90’s Nike yielded greater profits as Nike began to assume the appearance of athletic organization giant. In 1996 Nike was named marketer of the year (Nikebiz, 2009) as Nike’s innovative marketing strategies were beginning to flourish. Nike revolutionized the marketing and product market by introducing the Air Nikes, featuring Michael Jordan, the “Bo Knows” slogans, commercials and the launching of the empowering tag line “Just do it” the tag line was more recognized and popular by consumers than any other sports brand and arguably any brand.
Through its innovative marketing strategy Nike modified the products they offered and services provided to their customers. Nike’s Customer Base strategy is derived from evaluation of product based upon customer needs, customer benefits and product features. Facing customer needs on a global level for brand name athletic shoes and apparel, Nike succeeded in innovating fashion with technology to cater to the these specific needs of the consumer.
Today Nike continues to seek out innovative ways to develop advanced athletic products and methods in which creatively communicate and relate with the market. The success of Nike is based on a marketing business model that leverages factors and trends in the current operating market. As long as Nike continued to innovate on new designs of their products and processes with their assertive advertising and marketing strategies, Nike will be able to maintain leadership in innovation, product development and marketing in the sports-wear industry.
All three organizations mentioned above used innovation and creativity to transform, reinvent, transition and modify the services and products they offer in order to accommodate the market needs and demands. Innovation has proven to be an important advantage and ingredient for growth, profitability and major contributor to the business strategy. In all three of the examples innovation modified the business strategy to result in competitive advantage, meet and exceeding the expectations of the customers and provide the organization with future growth.
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Fortune 500. Retrieved July 17, 2009 from:http://money.cnn.com/magazines/fortune/fortune500/2009/snapshots/2184.htmlHarrah’s Entertainment. Retrieved on July 17, 2009